CA Technologies Reports Second Quarter Fiscal Year 2013 Results

CA Technologies (NASDAQ:CA) today reported financial results for its
second quarter of fiscal year 2013, ended September 30, 2012.

FINANCIAL OVERVIEW

Second Quarter FY13 vs. FY12

(in millions, except share data)

FY13

FY12

% Change

% Change CC**

Revenue

$1,152

$1,200

(4%)

0%

GAAP Income from continuing operations

$222

$236

(6%)

6%

Non-GAAP Income from continuing operations*

$274

$255

7%

13%

GAAP Diluted EPS from continuing operations

$0.48

$0.47

2%

15%

Non-GAAP Diluted EPS from continuing operations*

$0.59

$0.51

16%

22%

Cash Flow from continuing operations

$89

$190

(53%)

(50%)

* Non-GAAP income and earnings per share are non-GAAP financial
measures, as noted in the discussion of non-GAAP results below. A
reconciliation of non-GAAP financial measures to their comparable GAAP
financial measures is included in the tables following this news release.

**CC: Constant Currency

EXECUTIVE COMMENTARY

“While we had anticipated that several areas of our business would be
down in the second quarter, our new product and capacity sales fell
short of our expectations,” said Bill McCracken, chief executive
officer, CA Technologies. “Our performance was also affected by the
weakening global economy, which elongated sales cycles. Despite this
difficult environment, we were able to meet our expectations for margin
through disciplined expense management.

"We will continue to implement our customer market segmentation model,
introduce new products and solutions throughout the second half, and
build out our partner network. We also will manage carefully our
expenses to drive healthy operating margins for the full year,” said
McCracken.

REVENUE AND BOOKINGS

About 63 percent of the Company’s revenue came from North America, while
37 percent came from International operations.

Revenue year-over-year:

Total revenue was $1.152 billion, flat in constant currency and down 4
percent as reported.

Total revenue backlog was $7.460 billion, down 7 percent in constant
currency and 8 percent as reported. The current portion of revenue
backlog was $3.453 billion, down 2 percent in constant currency and 3
percent as reported. The Company continues to see a drop in backlog as
contracts come off the balance sheet prior to an expected increase in
the fiscal year 2014 renewal portfolio.

North America revenue was $730 million, flat in constant currency and
down 1 percent as reported.

International revenue was $422 million, flat in constant currency and
down 9 percent as reported.

Bookings year-over-year:

Total bookings in the second quarter were $837 million, down 13
percent in constant currency and 14 percent as reported, due in part
to lower Enterprise Solutions new product sales, mainframe capacity
sales and renewals.

The Company renewed a total of 10 license agreements with incremental
contract values in excess of $10 million each, for an aggregate
contract value of $232 million. During the second quarter of fiscal
year 2012, the Company renewed a total of 10 license agreements with
incremental contract values in excess of $10 million each, for an
aggregate contract value of $321 million.

The weighted average duration of subscription and maintenance bookings
for the quarter was 3.11 years, compared with 3.59 years for the same
period in fiscal year 2012.

North America bookings were $500 million, down 25 percent in constant
currency and as reported.

International bookings were $337 million, up 14 percent in constant
currency and 9 percent as reported.

EXPENSES AND MARGIN

Year-over-year GAAP results:

Operating expenses, before interest and income taxes, were $815
million, down 5 percent in constant currency and 6 percent as reported.

Operating income, before interest and income taxes, was $337 million,
up 12 percent in constant currency and 1 percent as reported.

Operating margin was 29 percent, up 1 percentage point from the prior
year period.

Year-over-year non-GAAP results exclude purchased software and other
intangibles amortization, share-based compensation, and certain other
gains and losses. The results also include gains and losses on hedges
that mature within the quarter, but exclude gains and losses of hedges
that do not mature within the quarter.

Operating expenses, before interest and income taxes, were $746
million, down 6 percent in constant currency and 9 percent as reported.

Operating income, before interest and income taxes, was $406 million,
up 12 percent in constant currency and 7 percent as reported.

Operating margin was 35 percent, up 3 percentage points from the prior
year period.

For the second quarter of fiscal year 2013, the Company’s effective GAAP
tax rate was 32.1 percent, compared with 27.8 percent in the prior year
period. The Company’s effective non-GAAP tax rate was 30.8 percent,
compared with 31.5 percent in the prior year period.

GAAP and non-GAAP earnings per share in the second quarter of fiscal
year 2012 were adversely affected by $44 million in costs, or about
$0.06 per share, associated with a workforce reduction. GAAP and
non-GAAP operating margin in last year’s second quarter also were
adversely affected by 3 percentage points each by the workforce
reduction.

SEGMENT INFORMATION

Mainframe Solutions revenue was $619 million, down 2 percent in
constant currency and 5 percent as reported. Operating expense was
$247 million and operating profit was $372 million. Operating margin
was 60 percent, up from 53 percent a year ago. There was a negative 3
percentage point operating margin impact in the prior period
associated with the above-mentioned workforce reduction.

Enterprise Solutions revenue was $438 million, up 1 percent in
constant currency and down 2 percent as reported. Operating expense
was $410 million and operating profit was $28 million. Operating
margin was 6 percent, flat from a year ago. There also was a negative
4 percentage point operating margin impact in the prior period
associated with the workforce reduction.

Services revenue was $95 million, up 3 percent in constant currency
and down 1 percent as reported. Operating expense was $89 million and
operating profit was $6 million. Operating margin was 6 percent, up
from 4 percent a year ago.

CASH FLOW FROM CONTINUING OPERATIONS

Cash flow from continuing operations in the second quarter was $89
million, compared with $190 million in the prior year. The decrease was
primarily due to a decrease in cash collections as a result of lower
billings.

With $1.294 billion in total debt outstanding and a borrowing position
of $164 million on the Company’s notional pooling arrangement, the
Company’s net cash, cash equivalents and investments were $790 million.

During the quarter, the Company repurchased 9.7 million shares in the
market for approximately $250 million.

The Company is currently authorized to repurchase an additional $654
million of common stock through fiscal year 2014.

Introduced a new version of CA
Infrastructure Management (CA IM),
the cornerstone of the Company’s converged infrastructure management
solution that enables a superior and differentiated customer
experience;

Announced it has been named as a component of the Dow
Jones Sustainability Indexes (DJSI) World Index and North America
Index for the second consecutive year: and,

Introduced an enhanced CA
Nimsoft Monitor with advanced network
flow analysis, enabling customers to visualize their IP traffic in
ways that can assist them in optimizing application service levels.

The Company updated its revenue and GAAP and non-GAAP earnings per share
from continuing operations and cash flow from continuing operations
guidance for fiscal year 2013. The following guidance consists of
"forward-looking statements" (as defined below).

GAAP diluted earnings per share from continuing operations growth in
constant currency in a range of 8 percent to 12 percent. At Sept. 30,
2012 exchange rates, this translates to GAAP reported diluted earnings
per share of $1.99 to $2.07. Previously, GAAP diluted earnings per
share from continuing operations growth in constant currency was in a
range of 12 percent to 14 percent.

Non-GAAP diluted earnings per share from continuing operations growth
in constant currency in a range of 6 percent to 10 percent. At Sept.
30, 2012 exchange rates, this translates to reported non-GAAP diluted
earnings per share of $2.36 to $2.44. Previously, non-GAAP diluted
earnings per share from continuing operations growth in constant
currency was in a range of 10 percent to 12 percent.

Cash flow from continuing operations growth in a range of negative 8
percent to negative 4 percent in constant currency. At Sept. 30, 2012
exchange rates, this translates to reported cash flow from continuing
operations of $1.38 billion to $1.44 billion. Previously, cash flow
from continuing operations growth was in a range of 4 percent to 6
percent in constant currency.

This outlook also assumes no material acquisitions and a partial
currency hedge of operating income. The Company expects a full-year GAAP
operating margin of 30 percent, down from the previously stated 31
percent and continues to expect a non-GAAP operating margin of 36
percent. The Company also continues to expect an effective full-year
GAAP and non-GAAP tax rate to come in closer to the high-end of the 30
to 31 percent provided at the outset of the fiscal year.

The Company anticipates approximately 449 million shares outstanding at
fiscal year 2013 year-end and weighted average diluted shares
outstanding of approximately 458 million for the fiscal year.

The Company also said it is modifying its long-term guidance. While the
multi-year guidance previously provided is the proper set of long-term
financial objectives for CA Technologies, the Company now expects the
timeline to achieve these objectives will be extended beyond its
original expectations.

CIO, CTO & Developer Resources

Webcast

This news release and the accompanying tables should be read in
conjunction with additional content that is available on the Company’s
website, including a supplemental financial package, as well as a
webcast that the Company will host at 5 p.m. ET today to discuss its
unaudited second quarter results. The webcast will be archived on the
website. Individuals can access the webcast, as well as this press
release and supplemental financial information, at http://ca.com/invest
or listen to the call at 1-877-561-2748. The international participant
number is 1-720-545-0044.

About CA Technologies

CA Technologies (NASDAQ: CA) provides IT management solutions that help
customers manage and secure complex IT environments to support agile
business services. Organizations leverage CA Technologies software and
SaaS solutions to accelerate innovation, transform infrastructure and
secure data and identities, from the data center to the cloud. Learn
more about CA Technologies at www.ca.com.

This news release, the accompanying tables and the additional content
that is available on the Company's website, including a supplemental
financial package, includes certain financial measures that exclude the
impact of certain items and therefore have not been calculated in
accordance with U.S. generally accepted accounting principles (GAAP).
Non-GAAP metrics for operating expenses, operating income, operating
margin, income from continuing operations and diluted earnings per share
exclude the following items: non-cash amortization of purchased software
and other intangibles, share-based compensation, fiscal year 2007
restructuring costs and certain other gains and losses, which includes
the gains and losses since inception of hedges that mature within the
quarter, but exclude gains and losses of hedges that do not mature
within the quarter. In fiscal year 2011, non-GAAP income also excludes
recoveries and certain costs associated with derivative litigation
matters. The effective tax rate on GAAP and non-GAAP income from
operations is the Company's provision for income taxes expressed as a
percentage of pre-tax GAAP and non-GAAP income from continuing
operations, respectively. Such tax rates are determined based on an
estimated effective full year tax rate, with the effective tax rate for
GAAP generally including the impact of discrete items in the period such
items arise and the effective tax rate for non-GAAP generally allocating
the impact of discrete items pro rata to the fiscal year's remaining
reporting periods. Adjusted cash flow from operations excludes
restructuring and other payments. Free cash flow excludes purchases of
property, equipment and capitalized software development costs. We
present constant currency information to provide a framework for
assessing how our underlying businesses performed excluding the effect
of foreign currency rate fluctuations. To present this information,
current and comparative prior period results for entities reporting in
currencies other than US dollars are converted into US dollars at the
exchange rate in effect on March 31, 2012, which was the last day of our
prior fiscal year. Constant currency excludes the impacts from the
Company's hedging program. The constant currency calculation for
annualized subscription and maintenance bookings is calculated by
dividing the subscription and maintenance bookings in constant currency
by the weighted average subscription and maintenance duration in years.
These non-GAAP financial measures may be different from non-GAAP
financial measures used by other companies. Non-GAAP financial measures
should not be considered as a substitute for, or superior to, measures
of financial performance prepared in accordance with GAAP. By excluding
these items, non-GAAP financial measures facilitate management's
internal comparisons to the Company's historical operating results and
cash flows, to competitors' operating results and cash flows, and to
estimates made by securities analysts. Management uses these non-GAAP
financial measures internally to evaluate its performance and they are
key variables in determining management incentive compensation. The
Company believes these non-GAAP financial measures are useful to
investors in allowing for greater transparency of supplemental
information used by management in its financial and operational
decision-making. In addition, the Company has historically reported
similar non-GAAP financial measures to its investors and believes that
the inclusion of comparative numbers provides consistency in its
financial reporting. Investors are encouraged to review the
reconciliation of the non-GAAP financial measures used in this news
release to their most directly comparable GAAP financial measures, which
are attached to this news release.

Cautionary Statement Regarding Forward-Looking Statements

The declaration and payment of future dividends is subject to the
determination of the Company's Board of Directors, in its sole
discretion, after considering various factors, including the Company's
financial condition, historical and forecast operating results, and
available cash flow, as well as any applicable laws and contractual
covenants and any other relevant factors. The Company's practice
regarding payment of dividends may be modified at any time and from time
to time.

Repurchases under the Company's stock repurchase program are expected to
be made with cash on hand and may be made from time to time, subject to
market conditions and other factors, in the open market, through
solicited or unsolicited privately negotiated transactions or otherwise.
The program, which is authorized through the fiscal year ending March
31, 2014, does not obligate the Company to acquire any particular amount
of common stock, and it may be modified or suspended at any time at the
Company's discretion.

Certain statements in this communication (such as statements containing
the words "believes," "plans," "anticipates," "expects," "estimates,"
"targets" and similar expressions) constitute "forward-looking
statements" that are based upon the beliefs of, and assumptions made by,
the Company's management, as well as information currently available to
management. These forward-looking statements reflect the Company's
current views with respect to future events and are subject to certain
risks, uncertainties, and assumptions. A number of important factors
could cause actual results or events to differ materially from those
indicated by such forward-looking statements, including: the ability to
achieve success in the Company's strategy by, among other things,
effectively rebalancing the Company's sales force to increase
penetration in growth markets and with large enterprises that have not
historically been significant customers, enabling the sales force to
sell new products, improving the Company's brand in the marketplace and
ensuring the Company's set of cloud computing, Software-as-a-Service and
other new offerings address the needs of a rapidly changing market,
while not adversely affecting the demand for the Company's traditional
products or its profitability; global economic factors or political
events beyond the Company's control; general economic conditions and
credit constraints, or unfavorable economic conditions in a particular
region, industry or business sector; the failure to adapt to
technological changes and introduce new software products and services
in a timely manner; competition in product and service offerings and
pricing; the failure to expand partner programs; the ability to retain
and attract adequate qualified personnel; the ability to integrate
acquired companies and products into existing businesses; the ability to
adequately manage and evolve financial reporting and managerial systems
and processes; the ability of the Company's products to remain
compatible with ever-changing operating environments; breaches of the
Company's software products and the Company's and customers' data
centers and IT environments; discovery of errors in the Company's
software and potential product liability claims; the failure to protect
the Company's intellectual property rights and source code; risks
associated with sales to government customers; access to software
licensed from third parties; risks associated with the use of software
from open source code sources; access to third-party code and
specifications for the development of code; third-party claims of
intellectual property infringement or royalty payments; fluctuations in
the number, terms and duration of the Company's license agreements as
well as the timing of orders from customers and channel partners; the
failure to renew large license transactions on a satisfactory basis;
changes in market conditions or the Company's credit ratings;
fluctuations in foreign currencies; the failure to effectively execute
the Company's workforce reductions; successful outsourcing of various
functions to third parties; events or circumstances that would require
us to record a goodwill impairment charge; potential tax liabilities;
acquisition opportunities that may or may not arise; and other factors
described more fully in the Company's filings with the Securities and
Exchange Commission. Should one or more of these risks or uncertainties
occur, or should our assumptions prove incorrect, actual results may
vary materially from those described herein as believed, planned,
anticipated, expected, estimated, targeted or similarly expressed in a
forward-looking manner. The Company assumes no obligation to update the
information in this communication, except as otherwise required by law.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.

• Mainframe Solutions – Our Mainframe Solutions segment addresses
the mainframe market and is focused on making significant
investments in order to be innovative in key management disciplines
across our broad portfolio of products. Ongoing development is
guided by customer needs, our cross-enterprise management philosophy
and our Mainframe 2.0 strategy, which offers management capabilities
designed to appeal to the next generation of mainframe staff while
also offering productivity improvements to today’s mainframe
experts. Our mainframe business assists customers by addressing
three major challenges: lowering costs, providing high service
levels by sustaining critical workforce skills and increasing
agility to help deliver on business goals.

• Enterprise Solutions – Our Enterprise Solutions segment includes
products that operate on non-mainframe platforms, such as service
assurance, security (identity and access management), service and
portfolio management, virtualization and service automation, SaaS,
and cloud offerings. Our offerings help customers address their
regulatory compliance demands, privacy needs, and internal
security policies. Enterprise Solutions also focuses on delivering
growth to the Company in the form of new customer acquisitions and
revenue, while leveraging non-traditional routes-to-market and
delivery models.

• Services – Our Services segment offers implementation,
consulting, education and training services to customers, which is
intended to promote a seamless customer experience and to increase
the value that customers realize from our solutions.

(2)

We regularly enter into a single arrangement with a customer that
includes Mainframe Solutions segment software products, Enterprise
Solutions segment software products and Services. The amount of
contract revenue assigned to segments is generally based on the
manner in which the proposal is made to the customer. The software
product revenue is assigned to the Mainframe Solutions and
Enterprise Solutions segments based on either: (1) a list price
allocation method (which allocates a discount in the total contract
price to the individual products in proportion to the list price of
the product); (2) allocations included within internal contract
approval documents; or (3) the value for individual software
products as stated in the customer contract. The price for the
implementation, consulting, education and training services is
separately stated in the contract and these amounts of contract
revenue are assigned to the Services segment. The contract value
assigned to each segment is then recognized in a manner consistent
with the revenue recognition policies we apply to the customer
contract for purposes of preparing the Condensed Consolidated
Financial Statements.

(3)

Segment expenses include costs that are controllable by segment
managers (i.e., direct costs) and, in the case of the Mainframe
Solutions and Enterprise Solutions segments, an allocation of shared
and indirect costs (i.e., allocated costs). Segment-specific direct
costs include a portion of selling and marketing costs, licensing
and maintenance costs, product development costs, general and
administrative costs and amortization of the cost of internally
developed software. Allocated segment costs primarily include
indirect selling and marketing costs and general and administrative
costs that are not directly attributable to a specific segment. The
basis for allocating shared and indirect costs between the Mainframe
Solutions and Enterprise Solutions segments is dependent on the
nature of the cost being allocated and is either in proportion to
segment revenues or in proportion to the related direct cost
category. Expenses for the Services segment consist only of direct
costs and there are no allocated or indirect costs for the Services
segment.

(4)

Other (gains) expenses, net consists of other unallocated costs
including foreign exchange derivative (gains) losses, and other
miscellaneous costs.

Table 5

CA Technologies

Constant Currency Summary

(unaudited)

(in millions)

Three Months Ended September 30,

Six Months Ended September 30,

% Increase

% Increase

% Increase

(Decrease)

% Increase

(Decrease)

(Decrease)

in Constant

(Decrease)

in Constant

2012

2011

in $ US

Currency (1)

2012

2011

in $ US

Currency (1)

Bookings

$

837

$

972

(14

%)

(13

%)

$

1,390

$

1,837

(24

%)

(23

%)

Revenue:

North America

$

730

$

735

(1

%)

0

%

$

1,456

$

1,451

0

%

1

%

International

422

465

(9

%)

0

%

841

912

(8

%)

0

%

Total revenue

$

1,152

$

1,200

(4

%)

0

%

$

2,297

$

2,363

(3

%)

0

%

Revenue:

Subscription and maintenance

$

963

$

1,022

(6

%)

(2

%)

$

1,940

$

2,029

(4

%)

(1

%)

Professional services

95

96

(1

%)

3

%

186

186

0

%

3

%

Software fees and other

94

82

15

%

16

%

171

148

16

%

17

%

Total revenue

$

1,152

$

1,200

(4

%)

0

%

$

2,297

$

2,363

(3

%)

0

%

Segment Revenue:

Mainframe solutions

$

619

$

655

(5

%)

(2

%)

$

1,247

$

1,301

(4

%)

(1

%)

Enterprise solutions

438

449

(2

%)

1

%

864

876

(1

%)

1

%

Services

95

96

(1

%)

3

%

186

186

0

%

3

%

Total expenses before interest and income taxes:

Total non-GAAP (2)

$

746

$

822

(9

%)

(6

%)

$

1,452

$

1,568

(7

%)

(4

%)

Total GAAP

815

867

(6

%)

(5

%)

1,579

1,688

(6

%)

(4

%)

(1)

Constant currency information is presented to provide a framework
for assessing how our underlying businesses performed excluding the
effect of foreign currency rate fluctuations. To present this
information, current and comparative prior period results for
entities reporting in currencies other than US dollars are converted
into US dollars at the exchange rate in effect on March 31, 2012,
which was the last day of our prior fiscal year. Constant currency
excludes the impacts from the Company's hedging program.

(2)

Refer to Table 7 for a reconciliation of total expenses before
interest and income taxes to total non-GAAP operating expenses.

GAAP income from continuing operations before interest and income
taxes

$

337

$

333

$

718

$

675

GAAP operating margin (% of revenue) (1)

29

%

28

%

31

%

29

%

Non-GAAP adjustments to expenses:

Costs of licensing and maintenance(2)

$

1

$

1

$

1

$

2

Cost of professional services(2)

1

1

2

2

Amortization of capitalized software costs(3)

27

26

54

49

Selling and marketing(2)

8

6

18

16

General and administrative(2)

7

4

15

12

Product development and enhancements(2)

4

4

8

9

Depreciation and amortization of other intangible assets(4)

13

15

27

34

Other (gains) expenses, net (5)

8

(12

)

2

(4

)

Total Non-GAAP adjustment to operating expenses

$

69

$

45

$

127

$

120

Non-GAAP income from continuing operations before interest and
income taxes

$

406

$

378

$

845

$

795

Non-GAAP operating margin (% of revenue) (6)

35

%

32

%

37

%

34

%

Interest expense, net

10

6

21

15

GAAP income tax expense

105

91

235

196

Non-GAAP adjustment to income tax expense(7)

17

26

18

50

Non-GAAP income tax expense

$

122

$

117

$

253

$

246

Non-GAAP income from continuing operations

$

274

$

255

$

571

$

534

(1)

GAAP operating margin is calculated by dividing GAAP income from
continuing operations before interest and income taxes by total
revenue (refer to Table 1 for total revenue).

(2)

Non-GAAP adjustment consists of share-based compensation.

(3)

Non-GAAP adjustment consists of purchased software amortization.

(4)

Non-GAAP adjustment consists of other intangibles amortization.

(5)

Non-GAAP adjustment consists of other miscellaneous costs including
gains and losses since inception of hedges that mature within the
quarter, but exclude gains and losses of hedges that do not mature
within the quarter.

(6)

Non-GAAP operating margin is calculated by dividing non-GAAP income
from continuing operations before interest and income taxes by total
revenue (refer to Table 1 for total revenue).

(7)

The full year non-GAAP income tax expense is different from GAAP
income tax expense because of the difference in non-GAAP income from
continuing operations before income taxes. On an interim basis, this
difference would also include a difference in the impact of discrete
and permanent items where for GAAP purposes the effect is recorded
in the period such items arise, but for non-GAAP such items are
recorded pro rata to the fiscal year's remaining reporting periods.

Refer to the discussion of non-GAAP financial measures included in
the accompanying press release for additional information.

Non-GAAP adjustment consists of other miscellaneous costs including
gains and losses since inception of hedges that mature within the
quarter, but exclude gains and losses of hedges that do not mature
within the quarter.

(2)

The non-GAAP effective tax rate is equal to the full year GAAP
effective tax rate, therefore no adjustment is required on an annual
basis. On an interim basis, the difference in non-GAAP income tax
expense and GAAP income tax expense relates to the difference in
non-GAAP income from continuing operations before income taxes, and
includes a difference in the impact of discrete and permanent items
where for GAAP purposes, the effect is recorded in the period such
items arise but for non-GAAP purposes, such items are recorded pro
rata to the fiscal year's remaining reporting periods.

Refer to the discussion of non-GAAP financial measures included in
the accompanying press release for additional information.

Income from continuing operations before interest and income taxes (1)

$

337

$

406

$

718

$

845

Interest expense, net

10

10

21

21

Income from continuing operations before income taxes

$

327

$

396

$

697

$

824

Statutory tax rate

35

%

35

%

35

%

35

%

Tax at statutory rate

$

114

$

139

$

244

$

288

Adjustments for discrete and permanent items (2)

(9

)

(17

)

(9

)

(35

)

Total tax expense

$

105

$

122

$

235

$

253

Effective tax rate (3)

32.1

%

30.8

%

33.7

%

30.7

%

Three Months Ended

Six Months Ended

September 30, 2011

September 30, 2011

GAAP

Non-GAAP

GAAP

Non-GAAP

Income from continuing operations before interest and income taxes (1)

$

333

$

378

$

675

$

795

Interest expense, net

6

6

15

15

Income from continuing operations before income taxes

$

327

$

372

$

660

$

780

Statutory tax rate

35

%

35

%

35

%

35

%

Tax at statutory rate

$

114

$

130

$

231

$

273

Adjustments for discrete and permanent items (2)

(23

)

(13

)

(35

)

(27

)

Total tax expense

$

91

$

117

$

196

$

246

Effective tax rate (3)

27.8

%

31.5

%

29.7

%

31.5

%

(1)

Refer to Table 6 for a reconciliation of income from continuing
operations before interest and income taxes on a GAAP basis to
income from continuing operations before interest and income taxes
on a non-GAAP basis.

(2)

The effective tax rate for GAAP generally includes the impact of
discrete and permanent items in the period such items arise, whereas
the effective tax rate for non-GAAP generally allocates the impact
of such items pro rata to the fiscal year's remaining reporting
periods.

(3)

The effective tax rate on GAAP and non-GAAP income from continuing
operations is the Company's provision for income taxes expressed as
a percentage of GAAP and non-GAAP income from continuing operations
before income taxes, respectively. The non-GAAP effective tax rate
is equal to the full year GAAP effective tax rate. On an interim
basis, the effective tax rates are determined based on an estimated
effective full year tax rate after the adjustments for the impacts
of certain discrete items (such as changes in tax rates,
reconciliations of tax returns to tax provisions and resolutions of
tax contingencies).

Refer to the discussion of non-GAAP financial measures included in
the accompanying press release for additional information.

Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application.
In their session at @ThingsExpo, Bramh Gupta, founder and CEO of robomq.io, and Fred Yatzeck, principal architect leading product development at robomq.io, will discuss how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at the same time reduce Time to Market (TTM) by using plug and play capabilities offered by a robust I...

After making a doctor’s appointment via your mobile device, you receive a calendar invite. The day of your appointment, you get a reminder with the doctor’s location and contact information. As you enter the doctor’s exam room, the medical team is equipped with the latest tablet containing your medical history – he or she makes real time updates to your medical file. At the end of your visit, you receive an electronic prescription to your preferred pharmacy and can schedule your next appointment.

SYS-CON Events announced today that Solgenia will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY, and the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Solgenia is the global market leader in Cloud Collaboration and Cloud Infrastructure software solutions. Designed to “Bridge the Gap” between Personal and Professional Social, Mobile and Cloud user experiences, our solutions help large and medium-sized organizations dr...

While not quite mainstream yet, WebRTC is starting to gain ground with Carriers, Enterprises and Independent Software Vendors (ISV’s) alike. WebRTC makes it easy for developers to add audio and video communications into their applications by using Web browsers as their platform. But like any market, every customer engagement has unique requirements, as well as constraints. And of course, one size does not fit all.
In her session at WebRTC Summit, Dr. Natasha Tamaskar, Vice President, Head of Cloud and Mobile Strategy at GENBAND, will explore what is needed to take a real time communications ...

The world's leading Cloud event, Cloud Expo has launched Microservices Journal on the SYS-CON.com portal, featuring over 19,000 original articles, news stories, features, and blog entries.
DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing.
Microservices Journal offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication.
Follow new article posts on Twitter at @MicroservicesE

SYS-CON Events announced today that Litmus Automation will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY.
Litmus Automation’s vision is to provide a solution for companies that are in a rush to embrace the disruptive Internet of Things technology and leverage it for real business challenges. Litmus Automation simplifies the complexity of connected devices applications with Loop, a secure and scalable cloud platform.

SYS-CON Events announced today the IoT Bootcamp – Jumpstart Your IoT Strategy, being held June 9–10, 2015, in conjunction with 16th Cloud Expo and Internet of @ThingsExpo at the Javits Center in New York City. This is your chance to jumpstart your IoT strategy.
Combined with real-world scenarios and use cases, the IoT Bootcamp is not just based on presentations but includes hands-on demos and walkthroughs. We will introduce you to a variety of Do-It-Yourself IoT platforms including Arduino, Raspberry Pi, BeagleBone, Spark and Intel Edison. You will also get an overview of cloud technologies s...

Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities.
Accordingly, attendees at the upcoming 16th Cloud Expo at the Javits Center in New York June 9-11 will find fresh new content in a new track called PaaS | Containers & Microservices
Containers are not being considered for the first time by the cloud community, but a current era of re-consideration has pushed them to the top of the cloud agenda. With the launch of Docker's initial release in March of 2013, interest was revved up several notches. Then late last...

The WebRTC Summit 2015 New York, to be held June 9-11, 2015, at the Javits Center in New York, NY, announces that its Call for Papers is open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 16th International Cloud Expo, @ThingsExpo, Big Data Expo, and DevOps Summit.

SOA Software has changed its name to Akana. With roots in Web Services and SOA Governance, Akana has established itself as a leader in API Management and is expanding into cloud integration as an alternative to the traditional heavyweight enterprise service bus (ESB). The company recently announced that it achieved more than 90% year-over-year growth. As Akana, the company now addresses the evolution and diversification of SOA, unifying security, management, and DevOps across SOA, APIs, microservices, and more.

Wearable technology was dominant at this year’s International Consumer Electronics Show (CES) , and MWC was no exception to this trend. New versions of favorites, such as the Samsung Gear (three new products were released: the Gear 2, the Gear 2 Neo and the Gear Fit), shared the limelight with new wearables like Pebble Time Steel (the new premium version of the company’s previously released smartwatch) and the LG Watch Urbane.
The most dramatic difference at MWC was an emphasis on presenting wearables as fashion accessories and moving away from the original clunky technology associated with t...

SYS-CON Events announced today that robomq.io will exhibit at SYS-CON's @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY.
robomq.io is an interoperable and composable platform that connects any device to any application. It helps systems integrators and the solution providers build new and innovative products and service for industries requiring monitoring or intelligence from devices and sensors.

The list of ‘new paradigm’ technologies that now surrounds us appears to be at an all time high. From cloud computing and Big Data analytics to Bring Your Own Device (BYOD) and the Internet of Things (IoT), today we have to deal with what the industry likes to call ‘paradigm shifts’ at every level of IT.
This is disruption; of course, we understand that – change is almost always disruptive.

SYS-CON Events announced today that SafeLogic has been named “Bag Sponsor” of SYS-CON's 16th International Cloud Expo® New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY.
SafeLogic provides security products for applications in mobile and server/appliance environments. SafeLogic’s flagship product CryptoComply is a FIPS 140-2 validated cryptographic engine designed to secure data on servers, workstations, appliances, mobile devices, and in the Cloud.

GENBAND has announced that SageNet is leveraging the Nuvia platform to deliver Unified Communications as a Service (UCaaS) to its large base of retail and enterprise customers. Nuvia’s cloud-based solution provides SageNet’s customers with a full suite of business communications and collaboration tools.
Two large national SageNet retail customers have recently signed up to deploy the Nuvia platform and the company will continue to sell the service to new and existing customers. Nuvia’s capabilities include HD voice, video, multimedia messaging, mobility, conferencing, Web collaboration, deskt...

SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched.
@WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication.
@WebRTCSummit Blog can be bookmarked ▸ Here
@WebRTCSummit conference site can be bookmarked ▸ Here

SYS-CON Events announced today that Cisco, the worldwide leader in IT that transforms how people connect, communicate and collaborate, has been named “Gold Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY.
Cisco makes amazing things happen by connecting the unconnected. Cisco has shaped the future of the Internet by becoming the worldwide leader in transforming how people connect, communicate and collaborate. Cisco and our partners are building the platform for the Internet of Everything by connecting the...

Temasys has announced senior management additions to its team. Joining are David Holloway as Vice President of Commercial and Nadine Yap as Vice President of Product.
Over the past 12 months Temasys has doubled in size as it adds new customers and expands the development of its Skylink platform. Skylink leads the charge to move WebRTC, traditionally seen as a desktop, browser based technology, to become a ubiquitous web communications technology on web and mobile, as well as Internet of Things compatible devices.

Docker is an excellent platform for organizations interested in running microservices. It offers portability and consistency between development and production environments, quick provisioning times, and a simple way to isolate services.
In his session at DevOps Summit at 16th Cloud Expo, Shannon Williams, co-founder of Rancher Labs, will walk through these and other benefits of using Docker to run microservices, and provide an overview of RancherOS, a minimalist distribution of Linux designed expressly to run Docker. He will also discuss Rancher, an orchestration and service discovery platf...

SYS-CON Events announced today that Vitria Technology, Inc. will exhibit at SYS-CON’s @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY.
Vitria will showcase the company’s new IoT Analytics Platform through live demonstrations at booth #330. Vitria’s IoT Analytics Platform, fully integrated and powered by an operational intelligence engine, enables customers to rapidly build and operationalize advanced analytics to deliver timely business outcomes for use cases across the industrial, enterprise, and consumer segments.

Our guest on the podcast this week is Mark Thiele, EVP of Data Center Technology at Switch.
We discuss the idea that private clouds are often equated with do-it-yourself and why that should be changed.
Taking sure you are receiving the private environment you need at a cost that can support your business.
Listen in to learn the different ways to own and manage a private cloud.

It seems today we are in a constant state of business and technology disruption. The convergence of the social, mobile, analytics, and cloud (SMAC) disruptions have both forced and enabled organizations to move at breakneck speeds addressing the needs and expectations of the lines of business/end users. This speed requires the development teams to be agile. They must be able to respond quickly to changing needs and demands of the organization. The quality assurance (QA) team still needs to ensur...

OmniTI has expanded its services to help customers automate their processes to deliver high quality applications to market faster.
Consistent with its focus on IT agility and quality, OmniTI operates under DevOps principles, exploring the flow of value through the IT delivery process, identifying opportunities to eliminate waste, realign misaligned incentives, and open bottlenecks. OmniTI takes a unique, value-centric approach by plotting each opportunity in an effort-payoff quadrant, then work...

If you have a Network Operations Center (or NOC, as the kids call it), you have a skilled set of eyes monitoring your system and alerting your engineers when things go wrong. (If you have something like a NOC, such as a first tier team that processes tickets, we’re looking at you, too). You also probably have strict SLAs and a need for high availability at all times. You can’t waste a second when things go down. Solutions like PagerDuty that help you identify and resolve incidents faster can hel...

DevOps is all the rage these days and with good reason as it promises to reduce the time-to-market for new applications. It also promises to improve change management, allowing teams to deploy changes to their applications quickly and efficiently. However, DevOps isn’t something you buy, install, or implement; rather it is the symptom of an appropriate organizational system.
In his session at DevOps Summit, Mark Thiele, EVP, Data Center Technologies at SUPERNAP International, will discuss how ...

When it comes to microservices there are myths and uncertainty about the journey ahead. Deploying a “Hello World” app on Docker is a long way from making microservices work in real enterprises with large applications, complex environments and existing organizational structures. February 19, 2015 10:00am PT / 1:00pm ET → 45 Minutes Join our four experts: Special host Gene Kim, Gary Gruver, Randy Shoup and XebiaLabs’ Andrew Phillips as they explore the realities of microservices in today’s IT worl...

You deployed an app. Nothing has changed in three days, but it suddenly crashes. Why? Memory leak.
You deployed an app. Nothing has changed in three weeks, but it suddenly stops working. Why? A database query came back empty and the web application freaked out trying manipulate a null value, deciding instead to just stop in its track and return nothing.
You deployed a load balancing service. Nothing has changed in three months, but it suddenly stopped load balancing your app. Why? One of the...

For me the mantra of achieving speed via automation tools is nothing new. In fact I was ‘automating’ Citrix Metaframe builds using windows scripting techniques back in 2004. The market though, has become awash with different automation products and it’s fair to say that many enterprises now suffer from ‘automation sprawl’. This results in a tactical rather than the strategic approach to automation required, meaning that benefits are never fully realized. In fact, I have spoken to many companies ...

Even though it’s now Microservices Journal, long-time fans of SOA World Magazine can take comfort in the fact that the URL – soa.sys-con.com – remains unchanged. And that’s no mistake, as microservices are really nothing more than a new and improved take on the Service-Oriented Architecture (SOA) best practices we struggled to hammer out over the last decade. Skeptics, however, might say that this change is nothing more than an exercise in buzzword-hopping. SOA is passé, and now that people are ...

While recently attending a Dynatrace User Group in Hartford, I had the opportunity to sit in on a great presentation from a leading US insurance company as they explained their three-year APM journey. I see a lot of these success stories, but this one was especially impressive. To see how they have refined their internal processes, successes and performance best practices to ensure delivery of high quality, high performing and highly scalable applications over these years.
The performance engin...

Microservices are the result of decomposing applications. That may sound a lot like SOA, but SOA was based on an object-oriented (noun) premise; that is, services were built around an object - like a customer - with all the necessary operations (functions) that go along with it. SOA was also founded on a variety of standards (most of them coming out of OASIS) like SOAP, WSDL, XML and UDDI. Microservices have no standards (at least none deriving from a standards body or organization) and can be b...

As a group of concepts, DevOps has converged on several prominent themes including continuous software delivery, automation, and configuration management (CM). These integral pieces often form the pillars of an organization’s DevOps efforts, even as other bigger pieces like overarching best practices and guidelines are still being tried and tested. Being that DevOps is a relatively new paradigm - movement - methodology - [insert your own label here], standards around it have yet to be codified a...

Microservices, for the uninitiated, are essentially the decomposition of applications into multiple services. This decomposition is often based on functional lines, with related functions being grouped together into a service. While this may sound a like SOA, it really isn't, especially given that SOA was an object-centered methodology that focused on creating services around "nouns" like customer and product. Microservices, while certainly capable of being noun-based, are just as likely to be v...

Our guest on the podcast this week is Jesse Proudman, Founder and CTO of Bluebox. We discuss Walmart’s recent OpenStack success story and the expanding capabilities of DIY private clouds. While DIY private clouds require large investments in configuring open source software to meet business needs, they can have several advantages over managed services alternatives. Listen in to learn how a DIY model could make or break private cloud deployment.

So HTTP/2 is official. That means all the talking is (finally) done and after 16 years of waiting, we've got ourselves a new lingua franca of the web.
Okay, maybe that's pushing it, but we do have a new standard to move to that offers some improvements in the areas of resource management and performance that make it definitely worth taking a look at.
For example, HTTP/2 is largely based on SPDY (that's Google's SPDY, for those who might have been heads down in the data center since 2009 an...

Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities.
Accordingly, attendees at the upcoming 16th Cloud Expo at the Javits Center in New York June 9-11 will find fresh new content in a new track called PaaS | Containers & Microservices
Containers are not being considered for the first time by the cloud community, but a current era of re-consideration has pushed them to the top of the cloud agenda. With the launch ...

Being a huge supporter of Platform-as-a-Service (PaaS), specifically, container-based PaaS, such as CloudFoundry and Heroku, I decided to apply my pricing experience to hacking up an estimate for delivering a mobile application inclusive of development through operations. The goal for me was to see if my own assertions that PaaS actually reduced both development and operating costs could be supported. My results were verified by both and independent consulting peer and a provider of PaaS.

The 16th Cloud Expo has added coverage containers and microservices to its program for New York, to be held June 9-11 at the Jacob Javits Convention Center.
Cloud Expo has long been the single, independent show where delegates and technology vendors can meet to experience and discuss the entire world of the cloud. This year will be no different.
Containers are an old concept that saw renewed life with the emergence of Docker in 2013. Then late in 2014, CoreOS shook up the cloud-computing w...

As pointed out by Mark, it’s very easy to make the cloud look financially attractive when pricing out a single application versus a portfolio of applications. Indeed, I would have to agree one of the most difficult things is to formulate an apples-to-apples comparison of cloud to data center. Even with the concept of reservations, the cloud cannot come close to the amortization of capital allocations across a portfolio of applications. The cloud is all about sizing and costing one application at...

Our guest on the podcast this week is Jason Bloomberg, President at Intellyx. When we build services we want them to be lightweight, stateless and scalable while doing one thing really well. In today’s cloud world, we’re revisiting what to takes to make a good service in the first place.microservices
Listen in to learn why following “the book” doesn’t necessarily mean that you’re solving key business problems.

The competition among public cloud providers is red hot, private cloud continues to grab increasing shares of IT budgets, and hybrid cloud strategies are beginning to conquer the enterprise IT world.

Big Data is driving dramatic leaps in resource requirements and capabilities, and now the Internet of Things promises an exponential leap in the size of the Internet and Worldwide Web.

The world of SDX now encompasses Software-Defined Data Centers (SDDCs) as the technology world prepares for the Zettabyte Age.

Add the key topics of WebRTC and DevOps into the mix, and you have three days of pure cloud computing that you simply cannot miss.

Cloud Expo - the world's most established event - offers a vast selection of 130+ technical and strategic Industry Keynotes, General Sessions, Breakout Sessions, and signature Power Panels. The exhibition floor features 100+ exhibitors offering specific solutions and comprehensive strategies. The floor also features two Demo Theaters that give delegates the opportunity to get even closer to the technology they want to see and the people who offer it.

Attend Cloud Expo. Craft your own custom experience. Learn the latest from the world's best technologists. Find the vendors you want and put them to the test.